Chapter 3 An Overview of the Retail Planning and Management Process

8/3/2019 Chapter 3 An Overview of the Retail Planning and Management Process

1/32

1

Situational analysis


2/32

2

The Situational Analysis

:

Company analysis

Product/service history

Competitive analysis

Geographical considerations

Consumer analysis SWOT analysis


3/32

3

Company Analysis

Company mission and vision

Sales and profit figures

Risk position (risk oriented or more conservative)

Corporate (or organizational) resources, including, but notlimited to, financial, technological, and human

Aggressiveness

Market share

Sales trends

Industry characteristics


4/32

4

Product History and Analysis

Product/service ()

Current problems facing the product, brand, orservice

Past retail successes or failures Past years' budgets

Past to present media spending


5/32

5

Product History and Analysis

total product Product history/additions/deletions


6/32

6

Types of Retail Institutions

Types of classification methods

Ownership -

Strategy

Channel

Nontraditional retailers (

)


7/32

7

Independent retailer- one that operates as a singleestablishment

Chain- one that operates multiple (more than one)retail store

Franchise- a contractual agreement between afranchisor and a franchisee that allows the franchiseto operate a retail establishment using the name(usually) and the franchisors operating methods

Cooperative- a situation where individual retailers,wholesalers, or consumers join together in a retailventure


8/32

8

Independents

Advantages

Quick response tocustomers

Involvement in thecommunity

Lower retail expenses

More opportunities tobuild customerrelationships

Disadvantages

Hard to take advantageof economies of scale

Lower levels ofexpertise in functionalareas

Smaller number of

employees


9/32

9

Independents (contd)

To compete with larger retailersindependents should:

Improve merchandising

Revive marketing practices Provide outstanding service to customers

Treat the customer right

Improve the efficiency of business

Implement changes Develop strategic clarity


10/32

10

Chain Stores

.

Many chain stores are divisions of larger

companies, for example, MarinopoulosCorporation owns:

Notos Galleries, department stores

Beauty Shop drugstores


11/32

11

Chain Stores

Advantages

Cost reductions througheconomies of scale

Use informationtechnology more

Human resourcecapabilities to hire best

and brightest

Disadvantages

Higher costs

Slower to respond to

environmental changes Harder to tailor

products to differentgeographical areas


12/32

12

Franchises

Advantages

Smaller capital outlay required

Established brand names

Economies of scale achieved

Training provided by franchisor on manyfunctional areas

Types Product franchising- the franchisee agrees to sell

the franchisors products or services


13/32

13

Types of Franchises (contd)

Business franchising- there is a great deal ofinteraction between the franchisor and thefranchisee; the franchisor agrees to support

all of the business functions while listening tothe wants and needs of its franchisees

Trademark franchising- the franchiseeacquires the franchisors identity and utilizes

the trademarks developed by the franchisor


14/32

14

Cooperatives

Overcome many disadvantages of smallerretailers

Types

Retail-sponsored co-ops: several retailers bandtogether

Wholesaler-sponsored co-ops: group developed

by wholesalers


15/32

15

Classification by Strategy

General merchandise retailers

Department stores

Discount stores

Specialty stores


16/32


17/32

17

Department Stores

Carry a wide breadth and depth of products

Offer more customer service than generalmerchandisers

Organized by departments (junior, menswear,shoes)

Use more IMC than other retailers (radio,newspapers, television, direct mail, etc)

Increase competition from specialty retailers anddiscounters


18/32

18

Discount Stores

Limited customer service

Lower prices than department stores

Merchandise viewed as less fashionable

Focus on high-volume, low-cost products Largest discount stores

Wal-Mart

Target Kmart


19/32

19

Specialty Retailers

Carry a limited number of products within oneor a few lines

Use market segmentation strategy instead of

mass marketing

Customer service levels typically high

Emergence of category killers


20/32

20

Food Retailers

Many food retailers carry merchandise outsidetraditional lines in order to remain competitive

Results in blurring of retail channels

Trend is to offer one-stop convenience Delicatessen

Greeting cards

Floral departments

In-store banks

In-store pharmacies Child care


21/32

21

Conventional Supermarkets

Self-service food store that generates 2million Euro/year or more

Typically carry grocery, meat, and fresh

produce

Carry very little general merchandise

Rely on high inventory turnover


22/32

22

Superstores

Food-based retailers

Larger than traditional supermarket

Carry expanded services

Delicatessen, bakery, seafood, nonfoods

Range from 20,000 square m to 150,000square m


23/32

23

Combination Stores

Combine food items with nonfood items

One-stop shopping experience

Common check-out area for both nonfooditems and food items

Typically 100,000+ square m


24/32

24

Hypermarkets

More than 40 percent of sales come fromnon-food items

Customers willing to drive further to shop at a

super center

Wal-Mart leads the category


25/32

25

Warehouse Clubs and Stores

Lower prices and lower number of services

Cater to small to midsize businesses inaddition to final consumer

Typically located in lower-rent areas of cities

Very little merchandizing

Often charge yearly membership fees

Carry few perishable items


26/32

26

Sams Club


27/32

27

Convenience Stores

Carry very limited assortment of products

Housed in small facilities

Major sellers are cigarettes (25% of sales)and non-alcoholic beverages (15% of sales)

Strategy is to intercept consumers betweentheir home and work

Higher prices than other formats


28/32

28

Classification by Channel

Brick

Nonstore retailers-

Bricks-and-clicks-


29/32

29

Nontraditional Retailers

Direct Marketing

Direct Selling

Vending Machines

E-tailing Internet


30/32

30

E-tailing

Advantages

Ease of bringing buyersand sellers together

Increases a companys

trading area

Convenient forconsumers

Can help reduce

inventory carrying costs

Disadvantages

Perceived lack of privacyand security

Difficulties in creatingcustomer friendly sites

Competition from otherformats


31/32

31

Competitive Analysis

Intratype-

Intertype-


32/32

32

Economic Situations

Pure competition ( )

Market in which there are many different buyers and sellers

Monopoly ()

Market in which there is only one retailer selling a specific

good or service Monopolistic competition (

)

Market in which there is limited competition from other

retailers Oligopolistic competition ()

A market with a few sellers of similar products where onecompany emerges as market leader

Documents

Chapter 3 An Overview of the Retail Planning and Management Process